PERRY/Reform a good first step

At the end of this year a new campaign finance regime begins in Mississippi. The new law (SB2689), passed by the legislature this past session and signed by the governor, specifically prohibits the use of campaign contributions for personal use; although it does still permit the use of campaign donations to fund costs associated with “holding office” including certain meals, travel and accommodation.

While much of the discussion on the need for campaign finance reform involved legislators and statewide candidates, the new prohibitions and requirements apply to all candidates including county and municipal offices. Candidates for county or municipal office may now file their campaign finance reports directly with the Secretary of State. They were previously only allowed to file with their county clerk or municipal clerk, who was then required to forward those reports to the Secretary of State. It’s a good first step, but now the Secretary of State should post all those reports online.

The new law invests investigatory and advisory roles in the Mississippi Ethics Commission. Candidates may seek advice on how to handle disbursements, and candidates or political committees who fail to report properly may face administrative penalties for failure to comply with the law. It’s a good first step, but no additional staff or funds have been obligated to Ethics Commission to carry out these additional duties. That might be fine for 2018, when campaigns (apart from special elections) will be mostly federal (unaffected by this law) or judicial (which already prohibited candidates from benefiting personally from the campaigns), but if the legislature wants this new campaign watchdog to have teeth in 2019, it will need to boost its budget.

Candidates and elected officials will no longer be able to report thousands of dollars in payments to credit cards and banks simply as “campaign expenses.” Campaign finance reports will now have to be itemized to show the end payment with each expenditure as a separate item. That’s a good first step, but thousands of dollars can still be largely hidden due to Mississippi’s $200 threshold for reporting. Currently, if someone contributes $201 to a campaign it must be reported. But if fifty people each contributed $200 (for a total of $10,000) those identities do not have to be revealed. Modern technology makes it easy for campaigns to report every contribution and expenditure; we should push for full disclosure, just as is required of federal candidates.

The reform law allows, upon filing a termination report (which means the campaign no longer accepts contributions or makes disbursements), any remaining money in the account may be handled in a number of ways: maintained in the account, contributed to candidates or political committees, donated to 501(c)(3) tax-exempt charitable organizations, donated to the State of Mississippi or be returned to donors. It’s a good first step, but it could prevent the public from knowing the final disbursements made by the campaign. Subsequent reports should be required when disbursements are made so the public knows what happened to the remaining campaign contributions.

A candidate can’t use campaign funds to buy a personal computer or a new cell phone for his child. It’s a good first step, but what happens to the computer or cell phone or printer or other materials purchased by the campaign after the campaign is over? The IRS and Federal Election Commission have rules on how to handle things like this, but the campaign finance laws are silent. If candidates keep campaign purchased items (which belong to the campaign; not the candidate) they should pay a depreciated value to the campaign; or if those items are given away, that depreciated disbursement should be disclosed.

This reform is a good first step at ending what many have called “legalized bribery” – the practice of giving to a candidate’s campaign only to see that money used by the candidate for personal reasons. But it doesn’t address rules about “gifts” to elected officials or candidates. That’s fine, because “gifts” are an ethics issue outside the realm of campaign finance; but restrictions on the use of campaign contributions could drive some supporters more toward the “gift” area to help out candidates personally. Mississippi requires lobbyists to disclose certain gifts to elected officials. And government officials are prohibited from using their office “to obtain pecuniary” benefits beyond state compensation. But most states spell out specific rules or prohibitions regarding elected officials receiving gifts from individuals or groups. Mississippi’s law is vague. We should also require gift disclosures so that anything not reported as income, a gift, or a campaign contribution would obviously be more sinister.

The House and Senate couldn’t agree on campaign finance reform in 2015, but this year it was a priority and the Legislature made a good first step toward cleaner government with greater disclosure. But there is more to do.

Brian Perry is a columnist for the Madison County Journal and a partner with Capstone Public Affairs, LLC. Reach him at reasonablyright@brianperry.ms or @CapstonePerry on Twitter.